|
<br />6. REPORTS AND RECORDS -- After operations begin, it is agreed that on or before [he last day of each month
<br />during [he term of [his lease Lessee shall submit a sworn, verified, written repot[ to Lessor, in which repot[ shall
<br />be entered and set down [he exact amount in weigh[ of all products and the assay thereof mined and removed from
<br />said leased premises during the preceding calendar month. Lessee agrees to keep and to have in possession
<br />complete and accurate books and records showing the production and disposition of any and all substances
<br />produced nn the leased land and to permit Lessor a[ all reasonable hours, to examine [he same or to furnish copies
<br />of same [o Lessor within 60 days following written request along with purchaser's support documentation. All
<br />said books and records shall be retained by Lessee and made available in Colorado to Lessor for a period of not
<br />less than 10 years. If any such examination shall reveal, or if either party shall discover any error or inaccuracy in
<br />its own or the other party's statement, payment, calculation, or determination, then proper adjustment or
<br />correction thereof shall be made as promptly as practicable [hereafter, except that no adjustment or correction
<br />shall be made if more than 10 years have elapsed between the time [he error or inaccuracy occurred and the
<br />discovery by either parry of said error or inaccuracy.
<br />Further, Lxssee shall furnish annually a complete operations report to Lessor disclosing the number of
<br />tons and the assay thereof of all ores, minerals and other materials mined front the premises during the preceding
<br />year. Lessee shall also furnish in said report geologic interpretations and recoverable reserve calculations, and
<br />maps and cross sections showing location of any mineral-bearing outcrops, drill holes, trenches. ore bodies and
<br />other prospecting and exploration activities, along with assays showing the antnunt of mineral contained in the
<br />ore. The records required to be maintained by Lessee and provided to Lessor upon request include logs of all
<br />strata penetrated and all geologic and h~dr~logic cttnd~tions encountered, and copies of in-hole .surveys--this
<br />information [o be collected and prepared under [he supervision of a yualifted geologist, geological engineer or
<br />mining engineer. Other qualified persons may collect and prepare this data, if agreed to in writing between
<br />Lessee and Lessor. Any request to keep certain informatiottc~nfidetttial should be in writing to Lessor at the [into
<br />such information is submitted to Lessor, and such data may be kept confidential as consistent with Stale law.
<br />Lessee shall submit, if requested by Lessor, such additional reports, records or documents regarding Lessee's
<br />operation on [he Leased Premises as necessary for the compliance with lease provisions.
<br />7. OVERRIDING ROYALTY LIMITATIONS -- It is agreed that this lease or any subsequent assignment hereof
<br />shall not be burdened with overriding royalttes the aggregate of which exceeds two percent (2%) of the gross
<br />value of the minerals or ore at the first point of sale. Lessor must be notified of all overriding royalties accruing
<br />to this lease.
<br />8. DEVELOPMENT -This paragraph has been deleted.
<br />9. PENALTIES -- A penalty shall be imposed for, but nct limited to, !ate payments, improper payments, operational
<br />deficiencies of any kind whatsoever, violations of any covenants of [iris lease, or any false statements made [o
<br />Lessor. Penalties shall be determined by Lessor unless otherwise provided for by law and ntay be in the font of,
<br />but not limited to, interest, fees, fines, andior lease cancellation. A penalty schedule shall be prepared by Lessor
<br />and shall become effective immediately after public notice. Said schedule may he changed from [inte to time after
<br />such notice.
<br />10. ASSIGNMENT -- Lessee, only with written consent of Lessor, may assign this lease as to the leasehold interest
<br />of such Lessee in all or part of the lands covered hereby; not less, however, than tracts of approxinta[ely forty
<br />(40) acres or governmental lots correspoitdingto a quaver-quattersection for any partial assignment.
<br />No assignment of undivided interests or retention or reservation of overriding royalties will be recognized
<br />or approved by Lessor, and the effect, if any, of any such assignments or reservations will be strictly and only as
<br />between the parries thereto and outside the terms of this lease. No dispute between parties [o any assignment or
<br />reservation shall operate to relieve Lessee from perfomtance of anv terms or cenr!irions hereof or to postpone the
<br />time [heref'or. Lessor will at all times be entitled to look solely to Lessee or his assignee shown on Lessor's books
<br />as being sole owner hereof, and for the sending of all notices required by this lease, for the performance of all
<br />terms and conditions hereof.
<br />if an assignment of a part of this lease is approved, a new lease designated as an assignment will be issued
<br />to the assignee covering the lands assigned fcr the balance of the t:rm of the base lease on the mining lease form
<br />in use at the time of assignment and limited as to term as said lease is limited. The assignor will be released and
<br />discharged from all further obligations for such lands assigned, as if the same had never been a part of this tease.
<br />11. ASSIGNMENT CONSIDERATION -- The consideration for approval of assignment by Lessor shall he (0% of
<br />the value of any consideration tendered to Assient.~r by Assignee fir the assignment. Divulgence of the value of
<br />these considerationsshall be mandatory, in affidavit form, which form shall he presented to Lessor along with the
<br />other assignment instruments in order to ohtain Lesstr's approval for the assignment. An assignment does not
<br />constitute a new lease but is a continuation of the base lease. Any attempt [o withhold this information shall be
<br />Page 3 of 7
<br />
|